US global commerce -- fairness coming and going

ByYNApril 22, 1986

ONE cannot fault the US business community and the Reagan administration for wanting America's overseas competitors to play by the rules in international commerce more forthrightly. That means, in part, that overseas firms should honor US copyright and patent laws. But precisely because the United States is urging trading partners to play fair and square in commerce, it seems curious that efforts are also under way in Washington to soften laws preventing American companies from engaging in bribery and corrupt payments abroad.

Some consistency! Surely the US cannot have it both ways -- demand a crackdown on overseas companies that engage in less than ethical patterns of conduct while at the same time making it easier for Americans to engage in dubious practices. Ironically, the two issues are coming to a head because of a series of trade bills being put together in the US House:

Regarding the effort to protect American companies against flagrant violations of US copyright and trademark rights, the Reagan administration is seeking a broad range of new powers to crack down on international ``product pirates.'' The White House is correct in seeking such action. Product pirates are overseas enterprises, mainly in such Asian nations as South Korea, Taiwan, and Hong Kong, that turn out look-alike US products. Sometimes the product is a book. Or a blouse, or pair of jeans. Sometimes its computer softwear, or a feature-length motion picture. But when they are all added up, they have already cost US producers anywhere from $10 billion to $20 billion in total lost sales.

The administration is quite properly seeking legislation to impose penalties against overseas companies that engage in such piracy, as well as penalize -- through trade curbs -- nations that knowingly condone product counterfeiting. Congress should speedily approve new legislation to help end product piracy.

In contrast, Congress should hesitate before altering laws that penalize companies from enaging in bribery abroad. Such prohibitions were imposed in the late 1970s during the Carter administration, following disclosures that a number of American businesses had engaged in ``payoffs'' abroad (usually to government officials) to help win sales.

A House Foreign Affairs subcommittee is scheduled to take up a series of amendments to the Foreign Corrupt Practices Act this week. Among other matters, they would substantially tighten the standard for prosecution -- thus making it harder to bring action against a company or individual suspected of engaging in bribery; allow certain types of ``routine'' payments abroad; and shift enforcement of the act from the Justice Department to the Commerce Department, which is considered more sympathetic to the business community.

Efforts in recent years to alter the Foreign Corrupt Practices Act have failed. Granted, there may be legitimate reasons for making minor changes in the existing legislation to expedite sales abroad -- or to untangle the business community from unnecessary red tape. But that said, the underlying rationale for maintaining a tough antibribery law is as valid today as it was back in the 1970s: American goods and services deserve global acceptance based on their intrinsic merits, not on suspect practices. If a product can't be sold except through bribery, it may not deserve to be sold in the first place.